FIRST FINANCIAL CORP /IN/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 26, 2017

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News Release
 
FIRST FINANCIAL CORPORATION
One First Financial Plaza, Terre Haute, Indiana 47807 (812) 238-6000
 
 
For more information contact:
April 26, 2017
Rodger A. McHargue at (812) 238-6334
 
First Financial Corporation reports 1st Quarter results

TERRE HAUTE, INDIANA - First Financial Corporation (NASDAQ:THFF) today announced results for the first quarter of 2017. Net income for the three months ending March 31, 2017 was $9.37 million compared to $13.68 million for the same period of 2016 which included an after-tax gain on the sale of the Corporation’s insurance subsidiary of $5.8 million. Diluted net income per common share was $0.77 compared to $1.08 for the same period of 2016. Return on assets for the three months ended March 31, 2017 was 1.26% compared to 1.85% for the three months ended March 31, 2016.

Average total loans for the first quarter of 2017 were $1.84 billion versus $1.76 billion for the comparable period in 2016, an increase of $83.6 million or 4.75%. Total loans outstanding increased $70.9 million, or 4.03%, from $1.76 billion as of March 31, 2016 to $1.83 billion as of March 31, 2017. On a linked quarter basis, average total loans increased $10.8 million, or 0.59%, from $1.83 billion for the quarter ending December 31, 2016.

Average total deposits for the quarter ended March 31, 2017 were $2.44 billion versus $2.42 billion as of March 31, 2016, an increase of 1.05%. Total deposits increased $37.4 million or 1.56% from $2.40 billion as of March 31, 2016 to $2.44 billion as of March 31, 2017.

The company’s tangible common equity to tangible asset ratio was 13.63% at March 31, 2017, compared to 13.05% at March 31, 2016.

Net interest income for the first quarter of 2017 was $26.5 million, an increase of 1.34% over the $26.2 million reported for the same period of 2016. The net interest margin for the quarter ended March 31, 2017 decreased to 4.05% from the 4.06% reported at March 31, 2016.

Asset quality remains strong with nonperforming loans decreasing 19.77% to $19.7 million as of March 31, 2017 versus $23.6 million as of March 31, 2016. The ratio of nonperforming loans to total loans also decreased to 1.20% as of March 31, 2017 versus 1.50% as of March 31, 2016.

The provision for loan losses for the three months ended March 31, 2017 was $1.60 million compared to the $835 thousand provision for the first quarter of 2016. Net charge-offs were $974 thousand for the first quarter of 2017 compared to $855 thousand in the same period of 2016. The Corporation’s allowance for loan losses as of March 31, 2017 was $19.4 million compared to $19.9 million as of March 31, 2016. The allowance for loan losses as a percent of total loans was 1.06% as of March 31, 2017 compared to 1.13% as of March 31, 2016.

Non-interest income for the three months ended March 31, 2017 and 2016 was $11.0 and $21.5 million, respectively. The 2016 first quarter non-interest income included a $13.0 million gain on sale of the Corporation’s insurance subsidiary. A first quarter 2017 cash recovery of previous other-than-temporary




impairment increased non-interest income $3.1 million. Service charges on deposits increased $273 thousand over the same period in 2016 and other service charges and fees increased $185 thousand.

Non-interest expense for the three months ended March 31, 2017 increased $112 thousand to $22.6 million compared to $22.5 million in 2016. On a linked quarter basis, non-interest expense increased $382 thousand from $22.2 million for the quarter ended December 31, 2016. On a year-over-year basis, salaries and employee benefits decreased $219 thousand. The Corporation’s efficiency ratio was 57.77% for the quarter ending March 31, 2017 versus 45.68% for the same period in 2016.
    
Book value per share was $34.92 at March 31, 2017, a 3.99% increase from the $33.58 at March 31, 2016. Shareholders’ equity increased 3.62% to $426.8 million from $411.9 million on March 31, 2016.

Norman L. Lowery, President and Chief Executive Officer, commented “We are pleased with our first quarter 2017 results. Our average loan balances continue to increase and we continue to grow our interest income and net interest income. Asset quality also remains healthy. It was another good quarter for First Financial.”

First Financial Corporation is the holding company for First Financial Bank N.A. in Indiana and Illinois, and The Morris Plan Company of Terre Haute in Indiana.







 
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2017
2016
2016
END OF PERIOD BALANCES
 
 
 
 
    Assets
 
$
2,957,285

$
2,988,527

$
2,939,240

    Deposits
 
$
2,438,012

$
2,428,526

$
2,400,655

    Loans
 
$
1,834,893

$
1,839,180

$
1,763,659

    Allowance for Loan Losses
 
$
19,395

$
18,773

$
19,926

    Total Equity
 
$
426,808

$
414,395

$
411,912

    Tangible Common Equity
 
$
390,470

$
377,931

$
375,000

 
 
 
 
 
AVERAGE BALANCES
 
 
 
 
    Total Assets
 
$
2,983,114

$
2,970,031

$
2,959,007

    Earning Assets
 
$
2,766,991

$
2,778,369

$
2,724,926

    Investments
 
$
919,599

$
923,957

$
955,996

    Loans
 
$
1,841,392

$
1,830,628

$
1,757,811

    Total Deposits
 
$
2,444,162

$
2,464,246

$
2,418,668

    Interest-Bearing Deposits
 
$
1,971,848

$
1,895,665

$
1,873,070

    Interest-Bearing Borrowings
 
$
50,164

$
35,531

$
46,026

    Total Equity
 
$
426,673

$
405,261

$
414,974

 
 
 
 
 
INCOME STATEMENT DATA
 
 
 
 
    Net Interest Income
 
$
26,507

$
26,406

$
26,157

    Net Interest Income Fully Tax Equivalent
 
$
28,031

$
27,956

$
27,692

    Provision for Loan Losses
 
$
1,596

$
939

$
835

    Non-interest Income
 
$
11,049

$
8,428

$
21,484

    Non-interest Expense
 
$
22,577

$
22,195

$
22,465

    Net Income
 
$
9,369

$
8,344

$
13,675

 
 
 
 
 
PER SHARE DATA
 
 
 
 
    Basic and Diluted Net Income Per Common Share
 
$
0.77

$
0.68

$
1.08

    Cash Dividends Declared Per Common Share
 
$
—

$
0.50

$
—

    Book Value Per Common Share
 
$
34.92

$
33.92

$
33.58

    Tangible Book Value Per Common Share
 
$
31.94

$
30.94

$
30.57

    Basic Weighted Average Common Shares Outstanding
 
12,217

12,201

12,646



















Key Ratios
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2017
2016
2016
Return on average assets
 
1.26
%
1.12
%
1.85
%
Return on average common shareholder's equity
 
8.78
%
8.24
%
13.28
%
Efficiency ratio
 
57.77
%
61.00
%
45.68
%
Average equity to average assets
 
14.31
%
13.65
%
13.92
%
Net interest margin
 
4.05
%
4.01
%
4.06
%
Net charge-offs to average loans and leases
 
0.21
%
0.27
%
0.19
%
Loan and lease loss reserve to loans and leases
 
1.06
%
1.02
%
1.13
%
Loan and lease loss reserve to nonperforming loans and other real estate
 
98.37
%
74.50
%
84.38
%
Nonperforming loans to loans
 
1.20
%
1.43
%
1.50
%
Tier 1 leverage
 
13.63
%
13.39
%
13.05
%
Risk-based capital - Tier 1
 
17.78
%
17.43
%
17.81
%




Asset Quality
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
 
 
2017
2016
2016
Accruing loans and leases past due 30-89 days
 
$
7,713

$
10,757

$
7,292

Accruing loans and leases past due 90 days or more
 
$
453

$
610

$
858

Nonaccrual loans and leases
 
$
11,106

$
13,492

$
13,248

Nonperforming loans and other real estate
 
$
22,011

$
25,198

$
26,465

Other real estate owned
 
$
2,294

$
2,531

$
2,850

Total nonperforming assets
 
$
34,004

$
37,567

$
39,617

Total troubled debt restructurings
 
$
8,158

$
8,565

$
9,509

Gross charge-offs
 
$
2,274

$
2,743

$
1,640

Recoveries
 
$
1,300

$
1,500

$
785

Net charge-offs/(recoveries)
 
$
974

$
1,243

$
855




















CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)
 
March 31,
2017
 
December 31,
2016
 
   (unaudited)
ASSETS
 

 
 

Cash and due from banks
$
50,522

 
$
75,012

Federal funds sold
5,000

 
6,952

Securities available-for-sale
855,681

 
853,725

Loans:
 

 
 

Commercial
1,102,672

 
1,106,182

Residential
420,963

 
423,911

Consumer
308,196

 
305,881

 
1,831,831

 
1,835,974

(Less) plus:
 

 
 

Net deferred loan costs
3,062

 
3,206

Allowance for loan losses
(19,395
)
 
(18,773
)
 
1,815,498

 
1,820,407

Restricted stock
10,369

 
10,359

Accrued interest receivable
12,099

 
12,311

Premises and equipment, net
48,566

 
49,240

Bank-owned life insurance
84,040

 
83,737

Goodwill
34,355

 
34,355

Other intangible assets
1,983

 
2,109

Other real estate owned
2,294

 
2,531

Other assets
36,878

 
37,789

TOTAL ASSETS
$
2,957,285

 
$
2,988,527

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 

Deposits:
 

 
 

Non-interest-bearing
$
429,963

 
$
564,092

Interest-bearing:
 

 
 

Certificates of deposit exceeding the FDIC insurance limits
45,193

 
43,759

Other interest-bearing deposits
1,962,856

 
1,820,675

 
2,438,012

 
2,428,526

Short-term borrowings
35,821

 
80,989

FHLB advances
132

 
132

Other liabilities
56,512

 
64,485

TOTAL LIABILITIES
2,530,477

 
2,574,132

 
 
 
 
Shareholders’ equity
 

 
 

Common stock, $.125 stated value per share;
 
 
 
Authorized shares-40,000,000
 
 
 
Issued shares-14,595,320 in 2017 and 14,578,758 in 2016
 
 
 
Outstanding shares-12,223,750 in 2017 and 12,216,712 in 2016
1,820

 
1,820

Additional paid-in capital
74,701

 
74,525

Retained earnings
431,195

 
421,826

Accumulated other comprehensive loss
(10,793
)
 
(14,164
)
Less: Treasury shares at cost-2,371,570 in 2017 and 2,362,026 in 2016
(70,115
)
 
(69,612
)
TOTAL SHAREHOLDERS’ EQUITY
426,808

 
414,395

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
2,957,285

 
$
2,988,527







 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Dollar amounts in thousands, except per share data)
 
 
Three Months Ended March 31,
 
2017
 
2016
 
   (unaudited)
INTEREST INCOME:
 

 
 

Loans, including related fees
$
21,941

 
$
21,184

Securities:
 

 
 

Taxable
3,757

 
3,831

Tax-exempt
1,827

 
1,822

Other
321

 
364

TOTAL INTEREST INCOME
27,846

 
27,201

INTEREST EXPENSE:
 

 
 

Deposits
1,275

 
987

Short-term borrowings
44

 
23

Other borrowings
20

 
34

TOTAL INTEREST EXPENSE
1,339

 
1,044

NET INTEREST INCOME
26,507

 
26,157

Provision for loan losses
1,596

 
835

NET INTEREST INCOME AFTER PROVISION
 

 
 

FOR LOAN LOSSES
24,911

 
25,322

NON-INTEREST INCOME:
 

 
 

Trust and financial services
1,317

 
1,334

Service charges and fees on deposit accounts
2,777

 
2,504

Other service charges and fees
3,185

 
3,000

Securities gains/(losses), net
2

 
3

Gain on sale of certain assets and liabilities of insurance brokerage
—

 
13,021

Insurance commissions
22

 
2,272

Gain on sales of mortgage loans
327

 
404

Other
3,419

 
(172
)
TOTAL NON-INTEREST INCOME
11,049

 
22,366

NON-INTEREST EXPENSE:
 

 
 

Salaries and employee benefits
13,376

 
13,595

Occupancy expense
1,768

 
1,731

Equipment expense
1,797

 
1,837

FDIC Expense
233

 
451

Other
5,403

 
5,733

TOTAL NON-INTEREST EXPENSE
22,577

 
23,347

INCOME BEFORE INCOME TAXES
13,383

 
24,341

Provision for income taxes
4,014

 
10,666

NET INCOME
9,369

 
13,675

OTHER COMPREHENSIVE INCOME
 

 
 

Change in unrealized gains/losses on securities, net of reclassifications and taxes
3,188

 
4,039

Change in funded status of post retirement benefits, net of taxes
183

 
304

COMPREHENSIVE INCOME
$
12,740

 
$
18,018

PER SHARE DATA
 

 
 

Basic and Diluted Earnings per Share
$
0.77

 
$
1.08

Weighted average number of shares outstanding (in thousands)
12,217

 
12,646






 


FIRST FINANCIAL CORP /IN/ Reports